Claus Juel-Jensen: Netto's black and yellow revolution

Trying to keep up with Claus Juel-Jensen isn't easy, and not just because the Dane's fluent English rattles along at an impressive speed. As managing director of the discount retailer Netto, he has an enthusiasm that tends to overwhelm - especially on an energetic tour of Netto's state-of-the-art distribution centre that's in danger of becoming a 100-metre dash and obstacle course combined.

In between avoiding forklift trucks, taking stairs two at a time, nipping across conveyor belts and waving at endless boxes of food - from tinned fishballs to Haribo sweets - the 42-year-old Juel-Jensen points out all that is great about his new depot. Built three years ago, it cost around 500m Danish kroner (£46m) and employs 300 people, nearly 200 less than the previous operation.

"This is good for the exercise!" he yells, dodging yet another high-speed piece of machinery.

But our tour of the centre, near Copenhagen, is not just about Netto's presence in Denmark, where "hard discounters" boast a 36 per cent market share and are able to make good use of such advanced facilities. It is also about Juel-Jensen's passion for the brand, with its black and yellow livery and Scottie dog logo, and his plans to establish it across Europe.

The hard-discounter premise is simple. Costs are kept to a bare minimum because ranges are small and the number of big-name branded goods limited. Depots are highly automated, while the stores are devoid of the trappings most of us Tesco and Sainsbury's shoppers take for granted - free carrier bags, baskets, lots of staff, even shelves (goods are often stacked up on pallets instead).

Most of Europe has taken to the concept like a duck to water. In Germany, for instance, Netto and its German rivals Aldi and Lidl boast a combined market share of around 50 per cent. But British consumers are taking their time warming to no-frills shopping. Deemed by many as catering only for students and those on low incomes, hard discounters have just 4.5 per cent of the market.

"I don't think many British consumers know how it works," says Juel-Jensen. "We're seen as some sort of convenience store. We cannot educate your consumers - the only thing we can do is adapt to the market and have good stores with good-quality products. Then we'll see the consumers start coming."

Juel-Jensen also stresses that Netto adopts a different approach to its rivals, with more branded goods and smaller shops that actually look like shops - albeit basic ones - rather than warehouses. The company's main suppliers are certainly the same as those used by the mainstream supermarkets - Procter & Gamble, Kraft, Nestlé and Unilever, to name just a few.

He believes this, in part, is why Netto will be able to do particularly well in the UK. "Of course we can do it, it's the reason we're investing a lot of money over there. We're earning money."

The group opened its first British store in 1990 in Leeds. It now has 148 shops, and Juel-Jensen thinks it is "realistic" to open between 15 and 25 a year. "It's a number we could handle," he says, although he adds that the group is planning to open 35 this year. However, he backs away from comments made by his UK head, Claus Waedeled, that Netto intends to have 1,000 British stores. "We have a very ambitious country manager," he quips, insisting that Waedeled's remarks were taken out of context.

He concedes that the UK growth plans depend on a number of factors outside his control. As well as having to leap planning hurdles, Netto has a battle on its hands with the Government and other more established grocers.

When making its ruling on Wm Morrison's takeover of Safeway last year, the Office of Fair Trading announced that the stores earmarked for disposal could not be sold to hard discounters because these were not "effective" competitors.

"We were a little bit worried when they said that," says Juel-Jensen. "In every other country where we're established, we're seen as a full competitor. Maybe they were afraid that we're a small company without the resources. It was not that nice."

The company is arguing its case with the Government, but so far has received little encouragement. "We have said how in other European countries, we're seen as full competitors and we're winning customers away - it's fast, easy and cheap buying in our stores. But they have their position and are going to stick by it."

Like any other smaller retailer, Netto also has issues regarding economies of scale and buying power. The likes of Tesco are able to put considerable pressure on branded suppliers simply because they are such important players. Juel-Jensen declines to discuss the matter, other than to confirm that the company is able to bulk-buy on the Continent for all its stores.

Juel-Jensen has moved up the ladder at Netto, joining its trainee programme after reading business studies at university, and working in stores before taking the top job a year ago.

During that time, the company has expanded to nearly 1,000 stores across Denmark, Germany, Sweden, Poland and the UK. But questions have been raised about its future. The chain is ultimately controlled by AP Moller-Maersk, leading to speculation that it could eventually be sold off by the logistics giant.

This year also saw Denmark thrown brutally on to the global stage when a local row about newspaper cartoons showing the Prophet Mohamed became front-page news around the world. A number of companies, such as the dairy group Arla, were financially hurt by the ensuing furore, as angry Muslims boycotted all things Danish.

Juel-Jensen says Netto escaped relatively unscathed. "We have stores in the UK and Germany, in areas where there are a lot of Muslims, but I just don't think they know [Netto is Danish].

"Normally, though, we Danes live quite anonymously. To suddenly be in the middle of it has been quite outstanding."

Talk to Juel-Jensen for any length of time and his pride at being Danish is apparent. At dinner, the waiter appears with a delicacy pre-ordered by him for his guests - salted herring eaten with lard and pickled beetroot, hailing from his home island of Bornholm ("pearl of the Baltic sea"), with schnapps chasers.

But he is also adamant that Netto can become a fixture on the UK's high streets. During the jog around the warehouse, he points to a sign put up by the company that built the depot. It was a Japanese firm, and it made the Danish warehouse from its European base in Slough. Which is just the sort of cross-border exercise that Juel-Jensen favours most of all.

BIOGRAPHY

BORN: 29 December 1962.

EDUCATION

Business studies, Copenhagen Business School; MA in business and science, University of Cologne.

CAREER

1992: joins Netto on graduate trainee programme.

1993: manager, development department (Berlin area).

1994: PA to managing director.

1996: manager, Netto Germany.

2005: MD, Netto International.